When I realised that I was really at risk to lose my house, I was frantic. No job… no money… and soon no house… that could not be happening to me! I had to do something and I had to do it now. Then, I had an idea: I would take in a lodger.
Now I had a solution but I also had questions; what do I need to do? How do I find a lodger? How much can I get and what about declaring that new income ? What if I we don’t get on?
So here are a few answers.
Get ready for your lodger
First of all, do you have a spare room and is it good enough?
In my case the answer was yes, I did, but no, it wasn’t. My house is not very big so the second bedroom is small. It is fine for sleeping but I really doubted anyone would want to live in it. Don’t forget that, even if your lodger has access to the rest of the house, they will probably want a space that will feel like a place of their own. They will want some privacy and, to be honest, so will you.
What you do about that depends on how desperate you are. I decided to give up the master bedroom and move into the smaller one.
Now, I had to find someone who would want to move in.
Don’t forget to check with your mortgage lender (if you own the house), your landlord (if you rent privately) or your local authority (if you rent through the council).
You will also need a Lodger’s Agreement that will lay out the basic terms and condition of the agreement. That way, both you and your lodger are protected. Although you can buy them, there are quite a few free ones online.
How to find a lodger
Once you are prepare, it is time to look for the perfect lodger.
At first, I had a look in the windows of my local shops but all the ads seemed quite old so I gave up on that idea, although it may depend on your neighbourhood.
I would advise to follow that approach as it will show you what other people do. Of course, different landlords (because that’s what you will be) will have different requirements but it will give you a pretty good idea.
You can then place an ad yourself or have a look to see if anybody is looking for a room in your area.
For safety, I would advise to have a friend or two with you when whoever answers your ad comes to visit the room. It will be a good opportunity for them to ask questions you might not think of in the excitement.
How much can you charge and how to declare it to the taxman
That will depend on where you live and how nice the room is. If, like me, you have no idea of the going rates, have a look online, and search for rooms on offer in your area.
As for the taxman, in the UK there is something called “Rent a Room Scheme”. It allows you to get up to £7500 per year (for 2016) tax free as long as the room you rent is furnished.
My personal opinion
I was extremely lucky in that, within a few hours of making the decision, I had found the perfect lodger. I didn’t even have to place an ad. I had a look to see if there was any demand for rooms in my area and there he was. I emailed and we agreed to an evening visit.
We hit it off straight away but the best sign for me was that my cat, who was very skittish around strangers, was literally begging him for belly rubs.
He stayed 8 years and became one of my best friends. We are still in contact now but I do miss him a lot.